IMF Working Papers

Are There International R&D Spillovers Among Randomly Matched Trade Partners? A Response to Keller

Author/Editor:

David T. Coe ; Willy A Hoffmaister

Publication Date:

February 1, 1999

Electronic Access:

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Summary:

Keller (1998) reexamines Coe and Helpman’s (1995) analysis of international R&D spillovers focusing on the weights used to define the foreign R&D capital stock. Keller creates “random” weights and shows that they give rise to positive estimates of international R&D spillovers, casting doubts on the robustness of Coe and Helpman’s findings. We show that Keller’s “random” weights are essentially simple averages with a random error. We derive alternative random weights and present regressions showing that when they are used to define the foreign R&D capital stock, the estimated international R&D spillover estimates are nonexistent, as would be expected.

Series:

Working Paper No. 1999/018

Subject:

Financial institutions Imports International trade Plurilateral trade Production Stocks Total factor productivity Trade balance